Live Blogging From Doing Business In China Seminar (III)

The seminar moderator, Franklin L. Dennis and R. Craig Holman, in-house legal counsel at Boeing, spoke on “Social Norms in Doing Business in Asia: China; Japan; Vietnam; Malaysia; Thailand and Korea.” I am generally not a big fan of these sorts of talks, particularly when given by attorneys. On top of that, I am inherently suspicious of someone purporting to be an expert on the social norms of six disparate countries.

Mr. Holman was fine. He spoke very little on “social norms.” Instead, he spoke on “Communications Opportunities in Asia,” which was scheduled to follow the “Social Norms” talk. He obviously knows his stuff, but because it was on large scale communications throughout Asia, I did not keep notes.

I take issue with Mr. Dennis’s assessment of the various countries of which he spoke, including China. He talked about Acer Computers as evidencing China’s development of high end technology. Acer is a Taiwanese company. He talked about how if you want to sell a product in China, the smart thing to do is to go to one of the big Chinese law firms for assistance. Generally, I view this as a bad idea. My experience with the China lawyers with whom I have worked is that they are first and foremost China attorney, not China businesspeople. Some of them are good businesspeople, most of them are not. The China maritime lawyers with whom I have worked in Qingdao and Dalian would be an excellent source of preliminary information regarding local maritime companies and would also be a good source for introductions to them. But I would only consider going to them or to any other law firm for assistance in finding manufacturers or distributors of a particular product if I had nowhere else to turn. But there are places to turn. There are countless good China consultants that assist foreign companies in getting into China. They are much better set up to do this than any law firm and this means they are likely to be both better and cheaper.

His view of China reeked of an enamored outsider. “Those guys are my friends.” “We talked of going to Tibet together.” “My Chinese friends tell me that communism in China was just an eleven year flirtation but I have never figured out what eleven years they are talking about.” Even China boosters like me cannot ignore that China was communist for a very long time and still is, at least politically.

He went on to state, definitively, that the Chinese are “better merchants, better traders, and better manufacturers” than Americans. I disagree. If selling products cheaply is the sign of a better merchant, then yes. But when it comes to merchandising, I think Apple Computers, Wal-Mart, Home Depot, Office Depot, Microsoft, Caterpillar, Coca Cola, Pepsico, Yum, Gillette, Harley Davidson, and Colgate are all far better merchants than any Chinese company. If the Chinese are such great merchants, why are they completely absent from every credible list of the world’s top brands?

The same holds true of China’s manufacturing acumen. Yes, Chinese factories have an amazing ability to produce products cheaply, but if China were tops in manufacturing, why have high-end manufacturers been so slow to set up factories or outsource there? Would you rather fly on a Boeing airplane (yes I know its parts are made all over the world, including China) or a Chinese airplane?

He also stated unequivocally that there will be Chinese cars in the United States within two years. Anyone wanna bet?

I bring these things up not to go after anyone, but to highlight the different views people have about China and to highlight the need for each company to develop its own knowledge base regarding the information information important to it.

One of the earlier seminar speakers talked of China having 1.4 billion consumers. That is somewhat true, but completely irrelevant. The important question for a company planning to sell into China is, how many consumers does China have that might buy my product? If the product is a necessity costing a dollar, then there may well be 1.4 billion consumers (ignoring, of course, that babies, toddlers, and prisoners rarely buy anything), but if it is a $2,000 luxury item, the number of consumers might be maybe 150,000,000 at most. Doing business in China is not easy and it is always a mistake to make it seem like it is.

I am a founder of Harris Bricken, an international law firm with lawyers in Los Angeles, Portland, San Francisco, Seattle, China and Spain.

I mostly represent companies doing business in emerging market countries. It has taken me many years to build my network and it takes constant communication and travel to maintain it. My work has been as varied as securing the release of two improperly held helicopters in Papua New Guinea, setting up a legal framework to move slag from Canada to Poland’s interior, overseeing hundreds of litigation and arbitration matters in Korea, helping someone avoid terrorism charges in Japan, and seizing fish product in China to collect on a debt.

I was named as one of only three Washington State Amazing Lawyers in International Law, I am AV rated by Martindale-Hubbell Law Directory (its highest rating), I am rated 10.0 by AVVO.com (its highest rating), and I am a SuperLawyer.

I am a frequent writer and public speaker on doing business in Asia and I constantly travel between the United States and Asia. I most commonly speak on China law issues and I am the lead writer of the award winning China Law Blog (www.chinalawblog.com). Forbes Magazine, Fortune Magazine, the Wall Street Journal, Investors Business Daily, Business Week, The National Law Journal, The Washington Post, The ABA Journal, The Economist, Newsweek, NPR, The New York Times and Inside Counsel have all interviewed me regarding various aspects of my international law practice.

About China Law Blog

We will be discussing the practical aspects of Chinese law and how it impacts business there. We will be telling you what works and what does not and what you as a businessperson can do to use the law to your advantage. Our aim is to assist businesses already in China or planning to go into China, not to break new ground in legal theory or policy.